This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: What is meant by diversifying an investment portfolio? What are the advantages of diversification? ... (Read 58 times)

storky111

  • Hero Member
  • *****
  • Posts: 561
on: Jun 29, 2018
What is meant by diversifying an investment portfolio? What are the advantages of diversification?
 
  What will be an ideal response?

Question 2

If the economy were truly made of industries that fit the textbook definition of perfect competition what do you expect would be a major disadvantage of this from the consumer's perspective?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Tonyam972

  • Sr. Member
  • ****
  • Posts: 342
Reply #1 on: Jun 29, 2018
Answer to Question 1

Diversification means that investors spread their investment across more than one asset. Diversification allows investors to reduce risk as individual assets are hit by different economic shocks. Putting a little bit of money in all of these different investment baskets reduces exposure to any single shock.
A-head: DIVERSIFICATION
Concept: Diversification

Answer to Question 2

One of the assumptions of perfect competition is that the products are all homogeneous. This would clearly reduce product variety across industries and eliminate consumer choice.


storky111

  • Hero Member
  • *****
  • Posts: 561
Reply #2 on: Jun 29, 2018
Thank you :)


Tonyam972

  • Sr. Member
  • ****
  • Posts: 342
Reply #3 on: Jun 29, 2018
Happy to help you


« previous next »
 

Did you know?

There are 20 feet of blood vessels in each square inch of human skin.

Did you know?

More than 20 million Americans cite use of marijuana within the past 30 days, according to the National Survey on Drug Use and Health (NSDUH). More than 8 million admit to using it almost every day.

Did you know?

Between 1999 and 2012, American adults with high total cholesterol decreased from 18.3% to 12.9%

Did you know?

Never take aspirin without food because it is likely to irritate your stomach. Never give aspirin to children under age 12. Overdoses of aspirin have the potential to cause deafness.

Did you know?

No drugs are available to relieve parathyroid disease. Parathyroid disease is caused by a parathyroid tumor, and it needs to be removed by surgery.

In 2009, historian Woody Holton described how Abigail Adams shrewdly invested in the Continental Con In 2009, historian Woody Holton described how Abigail Adams shrewdly invested in the Continental Con
Many former slaves understood that illiteracy was an implement of bondage. The Freedmen’s Bureau bui Many former slaves understood that illiteracy was an implement of bondage. The Freedmen’s Bureau bui
Steel-toed shoes are a worthwhile investment to help prevent foot injury due to falling objects. ... Steel-toed shoes are a worthwhile investment to help prevent foot injury due to falling objects. ...
Relationship between Trust and Investment Relationship between Trust and Investment
Investment in Computers as a Percentage of GDP, 1982–2009 Investment in Computers as a Percentage of GDP, 1982–2009
Consider a two-period economy with no investment opportunities: first and second period output ... Consider a two-period economy with no investment opportunities: first and second period output ...
Video: Introduction to Eating Disorders

For a complete list of videos, visit our video library